Critical Illness Cover (CIC)
Pays out on diagnosis of a specified condition during the policy term, often regardless of the level or speed of recovery.
Income Protection (IP)
Tax-free replacement income in the event of ill health until you either return to work, retire, the policy term expires, or death.
Family Income Benefit (FIB)
Instead of paying out a lump sum, this type of cover provides a tax free annual income until the end of the term specified at outset.
A trust is important if, on your death, you wish the proceeds of your Life Insurance to be paid to your dependants in a straightforward manner.
Level Term Assurance (LTA)
Life cover that pays out a fixed lump sum if a person dies within the specified period of the policy.
Increasing Term Assurance
The cover increases every year without the need for a medical. Not as popular as Level Term, but it should be as people may require additional cover in line with increases in their income and inflation.
Mortgage Protection Assurance (MPA)
Life Cover where the lump sum reduces in line with the outstanding mortgage balance over time.
Decreasing Term Assurance (DTA)
Decreasing life cover is similar to MPA, although this cover decreases at a flat, fixed rate each year as opposed to matching a mortgage, which typically decreases more slowly in the early years.
Renewable Term Assurance (RTA)
Typically short term cover that can be renewed, without medical underwriting, every 5 - 10 years
Covertible Term Assurance (CTA)
Level term life cover with the built in option to convert the policy into something different, such as a Whole of life policy, at a later stage.
Whole of Life
Open ended life cover. Available either with an investment element or as a more expensive guaranteed rate, non-investment contract.
Terminal Illness Benefit (TIB)
Not to be confused with CI, this benefit simply allows those who are diagnosed with less than 12 months to live to claim early on a life insurance policy. The benefit is often included with life cover at no extra cost.
Accident, Sickness and Unemployment (ASU) - also known as Mortgage Payment Protection Insurance (MPPI)
Tax-free replacement income to cover the monthly mortgage payments and other regular outgoings, in the event of ill-health or unemployment, usually for up to one year.
Waiver of Premium
Covers the cost of premiums during periods of ill health and/or unemployment.
Total and Permanent Disability (TPD)
Most critical illness policies will offer TPD, which covers any illnesses and medical conditions not listed, where there is no long term prospect of recovery.
Guaranteed and Reviewable Premiums
Guaranteed rates will stay the same throughout the term of the policy. Reviewable rates can be reviewed at the insurer's discretion (usually after the first five years).
Policies can be linked to inflation where premiums and benefits increase annually.